0 Your Pension: How will you fund it? By The Bower Team / In Retirement Planning Huge numbers of people approaching retirement age — millions in fact – are heading for a worrying mix of hefty mortgages with no savings. A report by Aviva found that 25% of ‘pre-retirees’ – those aged between 55 and 64 – have a mortgage and in 20% of those cases it exceeds £75,000. The report, which came from a study of over 1200 people, stated that 40% of pre-retirees have average savings of only £8,600, excluding pensions, and that this sum could easily be swallowed up should a household emergency occur. In Denial about Retirement Funding Further, countless pre-retirees have been living in a state of denial about how they will survive when they retire and many don’t even give their pension statements a second glance before rendering them to the filing cabinet, instead believing their property will act as a ‘cash machine’ when they finish working and that by downsizing to a smaller home they will be able to create a retirement fund. However, pension experts warn against relying on this widely held approach of using a property as a pension because when it comes to it, few people at retirement age will actually want to move out of the property that they have called home for many years. Most Retirees won’t want to Downsize Geoff Charles, Managing Director of award winning equity release specialists Bower, agrees that most people at retirement age will not wish to move home and suggests regulated lifetime mortgages or home reversion plans as alternatives, although is keen to point out that relying on your main residence as the chief means of retirement funding is not a good idea. Releasing equity through a regulated lifetime mortgage or home reversion plan can allow homeowners aged 55 plus to pay off debts, can provide a monthly income and can fund retirement aspirations whilst guaranteeing staying in the home; so no need to move unlike with downsizing. It is important to note that the guarantee of staying in the property and also that of never owing more than its value is only provided by plans endorsed by the organisation Safe Home Income Plans (SHIP) whose members abide by their code of practice. Geoff Charles says, ‘For those reaching, or in retirement, with insufficient savings or income, but with equity in their property, regulated equity release through lifetime mortgages and home reversion plans could help fund their retirement by supplementing other sources of income or savings.’ Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, please ask for a personalised illustration. Bower is an FCA regulated independent financial advice company that offers specialist advice on equity release throughout the south of England. For more information e-mail email@example.com or call 0800 411 8668. Bower offers a no obligation initial consultation to homeowners considering Equity Release.